Markets
Exclusive: XRP Failed to Keep Pace with Bitcoin and Ethereum in the 2024 Bull Market – Experts Explain Why
The cryptocurrency market rebounded strongly in 2024 after a prolonged bear market that halted capital investment in the sector.
Buoyed by growing institutional interest in spot ETFs, leaders like Bitcoin (CRYPTO: Bitcoin) It is Ethereum (CRYPTO: ETH) increased by more than 60% year-to-date, according to data from Benzinga Pro. Furthermore, the total value of the cryptocurrency market has grown by 55% since the beginning of the year,
However, amid the resurgence, XRP (CRYPTO: XRP), one of the largest and most popular cryptocurrencies, has lagged significantly behind.
The associated currency Ripple Labs and the XRP Reason is down 16% year to date, making it one of the few large-cap cryptocurrencies to experience negative price movements this year.
Benzinga spoke to experts to understand the factors that are hurting the payments-focused cryptocurrency in what appears to be a bull market.
The legal tangle:
Grace ChenCryptocurrency exchange CEO Bitgetcited the ongoing legal dispute with the SEC as a significant factor hindering the rise of XRP.
She said the legal challenges and regulatory uncertainty surrounding XRP may have created a level of caution among investors.
“XRP has faced criticism and skepticism within the cryptocurrency community due to its centralized nature, pre-mined supply, and association with Ripple Labs. This negative perception may have decreased demand for XRP and limited its price appreciation compared to more decentralized counterparts and community-based cryptocurrencies,” Chen added.
Recall that Ripple secured a partial victory last year after the judge ruled that XRP is a security when sold to institutional investors but not to the general public.
Ripple token sale
Another factor highlighted by Chen was the selling pressure that the coin routinely faces due to Ripple Labs’ actions.
“Ripple periodically sells XRP tokens to fund its operations and invest in new projects. This consistent selling pressure from Ripple’s token holdings may be putting downward pressure on the price of XRP, limiting its ability to recover significantly,” Chen stated.
Note that Ripple is the largest holder of XRP. A recent report suggested that Ripple could execute its largest token dump of 400 million XRP, worth $207 million, in June.
The approval of Bitcoin and Ethereum Spot ETFs
Interestingly, Kadan Stadelmann, Blockchain platform CTO Komodo, observed the recent approval of Ethereum and Bitcoin spot ETFs as a reason for XRP’s declining relevance.
He stated: “The approval of the Ether ETF has brought a lot of legitimacy to ETH. Previously, XRP was labeled as a cryptocurrency for institutions. Now, it appears that Bitcoin and Ethereum are gaining significantly more momentum in this large sector of the market.”
Benzinga reached out to Ripple Labs to respond to the arguments presented above.
What are the chances of an XRP bull run?
Gracy Chen said that XRP’s bullish prospects appear uncertain. Its inability to break through key price levels and sustain the upward trend has kept investors cautious.
Kadan Stadelmann believed that the biggest bullish catalyst for the market would be if the SEC did a 180-degree turn.
“If the SEC decides to approve XRP ETFs, it would revitalize hopes for institutional adoption of the project. Due to the ongoing legal process, this scenario will probably not happen until at least 2025”, he argued.
At the time of writing, XRP is trading at $0.5196, down 0.13% in the last 24 hours, according to data from Benzinga Pro.
Photo courtesy: Michaela Jilkova at Shutterstock.com
These insights set the stage for deeper discussions in the next Benzinga Future of digital assets event on November 19th.
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